With low barriers to entry, we do operate in a complex, fragmented and volatile environment with millions of players, big and small. Technological advancements also mean we can no longer laugh at machine translation, pretend video interpreting isn’t the next big thing or file away artificial intelligence as science fiction.
The continued pressure on pricing and quality has already kicked off a wave of consolidation and acquisitions. We’re seeing more and more LSPs being swallowed by the bigger fish who outsource everything from their customer care to project management to translation.
Our clients want everything to be done cheaper, faster and better, too. Remember when our aim was to educate them? We can tick that box: they’ve educated themselves, raised the bar and expectations which many of LSPs can no longer meet.
All in all, a pretty bleak picture. The truth is many of us have been flying by the seat of our pants for a long time, offering mediocre quality and service. We’ve been selling the same thing, packaged differently. But before closing shop, let’s look at that diversification again. Surely there is something we can do since language services are one of the most progressive industries to be in today.
Diversification doesn’t mean doing more of the same: it means doing something different. It’s a strategy allowing a company to develop additional lines of business, and to extend and broaden service range to boost sales. Diversification is also about exploring new markets and taking new risks. The key to diversifying successfully is having a well-established core business, conducting research on new opportunities and ensuring you have the right people behind you. The different types of diversification are:
- Horizontal – offering new products or services that could appeal to your company´s current customer groups.
- Vertical - controlling all stages of the supply chain, from obtaining the raw material to the distribution of the product to clients.
- Concentric - expanding the portfolio by adding new products or services with the aim of utilising the existing technologies and systems.
- Heterogeneous – exploring new products or services that appeal to new clients that have no relation to current products, equipment or distribution channels.
- Corporate - production of unrelated but profitable goods, often tied to large investments with high returns.
When we, at Polaron, diversified in 2003 from a B2B language services provider into a B2C business of European citizenship through descent, our focus remained the same – excellent translations backed up by great project management, seamless customer service and turn key solutions. We simply though: what else can we do in this crowded space that is unique, difficult to replicate and brings cash flow to the table? In the end, our two arms of the business, Polaron Language Services and Polaron European Citizenship are successful in their own right. Both are doing well and complement each other, under one roof.
Whether you decide to diversify or not and what it’s going to look like is up to you. Just bear in mind that companies that don’t adjust to the agile business environment of today may struggle. So, if death isn’t an option for you, get the creative juices flowing. It’s a decision business owner are making every day in every business sector – diversify or die.
Do's and don’ts of diversification according to Eva:
- Don’t do more of the same: do something different. Expand in new directions.
- Don’t think about what everybody does but consider what you do better than your competitors.
- Do not bite-off more than what you can chew.
- Look beyond your own back yard.
- Find related products and offer integrated solutions.